Transportation Committee

JOINT FAVORABLE REPORT

Bill No.:

HJ-1

Title:

RESOLUTION PROPOSING A STATE CONSTITUTIONAL AMENDMENT TO PROTECT THE RESOURCES OF THE SPECIAL TRANSPORTATION FUND.

Vote Date:

3/15/2016

Vote Action:

Joint Favorable

PH Date:

2/29/2016

File No.:

252

SPONSORS OF BILL:

Transportation Committee; (Governor's Bill) Rep Sharkey, 88th District; Rep. Aresimowicz, 30th District; Senator Looney, 11th District; Senator Duff, 25th District

REASONS FOR BILL:

To create a constitutional transportation “lockbox” that will maintain the Special Transportation Fund (STF) as a perpetual fund. It will direct the resources of the STF “solely for transportation purposes,” including the payment of debt service on obligations incurred for transportation purposes”. The resolution requires that “sources of funds, moneys, and receipts of the state credited, deposited, or transferred” to the STF on or after the amendment' effective date “be credited, deposited, or transferred” to the STF, “so long as such sources are authorized by statute to be collected or received by the state.” It prohibits the legislature from passing any law allowing STF resources to be used for any purpose other than transportation purposes or the payment of debt service on obligations incurred for transportation purposes.

NOTE: The resolution's language is almost identical to that of Resolution Act 15-1, passed in the December 2015 Special Session. The only difference is (lines 18 and 19). This resolution adds the phrase “and the payment of debt service on obligations of the state incurred for transportation purposes” at the end of the resolution).

PROCEDURE: If three-quarters of the members of each chamber vote to approve the resolution, it will be placed on the November 2016 general election ballot. If approved by the voters, the amendment will take effect when the secretary of the state certifies the vote.

RESPONSE FROM ADMINISTRATION/AGENCY:

Governor Dannel P. Malloy – Connecticut must invest in transportation to fix our aging infrastructure and ensure that we compete in the modern economy. We cannot wait any longer to begin. Our state has seen decades of underinvestment, and it is time we reverse it to create jobs and build a strong economy for the future. After years of passivity toward transportation investment, we are facing a series of challenges that demand our attention. The statistics alone are staggering: 10% of Connecticut's bridges are structurally deficient and 25% are functionally obsolete. Of our roads, 41% are found to be in “poor” condition. As a result, Connecticut's residents pay an extra $1.6 billion in vehicle operating costs due to our road conditions. The economic cost of traffic congestion is more than $4.2 billion. Four movable bridges on the nation's busiest commuter rail line are over 100 years old. The average age of the 203 bridges along the New Haven Line is 93 years old. 70% of our bridges are at least 50 years old. 73 of the 83 state-owned diesel rail coaches are at or closely approaching the end of their useful life.

It has been decades since Connecticut has had a long-term transportation plan. We finally have one. We have presented a vision for the future, and with it, an opportunity to bring our transportation system into a state of excellent condition so our citizens can travel over sound and safe roads and bridges, have a speedier and more efficient rail system, an interconnected, modern bus system, markedly advance our bicycle and pedestrian experiences, and sharply cut congestion so it ceases being an anchor on the state's economy.

We all agree that transportation has held us back and that the status quo does not work. There has been much talk about how to “structurally change” how we operate. The bottom line is this: a constitutional lockbox to protect transportation funds epitomizes one of these structure changes. It is, by it's very definition, a structural budgetary reform. It will help ensure that we never again fall behind on critical infrastructure investments.

We need to adapt to the changes in the world and the economy by transforming our transportation system starting with this structural budgetary change: a constitutional transportation lockbox. The voters should decide, this November, whether or not they agree. We should not impede this choice, and the time to let them decide is now.

NATURE AND SOURCES OF SUPPORT:

Connecticut Chapter of the American Planning Association, Amanda Kennedy and John Guszkowski, Government Relations Committee Co-chairs – Ensuring the provisions of a strong and stable transportation infrastructure is critical to the future success of Connecticut. Transportation improvements are long-term investments and require long-term planning and reliable funding. It is their hope that the proposed resolution will create a mechanism to ensure the dedication and commitment to this goal. CCAOA supports HJ1 as proposed.

American Council of Engineering Companies, Paul Brady, Executive Director - representing over 90 engineering firms providing independent engineering services to the public and private sector - Members support a constitutional amendment that would ensure that transportation-related revenues are deposited in the Special Transportation Fund and that those funds are used for transportation purposes only. In order to build support for the revenue increases that will be necessary to rebuild our transportation infrastructure, we must give the public the confidence that their user fees will be spent for the purposes they're intended. National surveys show consistent support for increasing fees that will be dedicated to improving their commute and improving the economy. A constitutional lockbox will save taxpayers money because the state will be able to pay less interest for bonds that are protected by a constitutional lockbox.

Karen Burnaska, Coordinator, Transit for Connecticut a statewide coalition of 33 business, social service, environmental, planning, transportation and civic organizations dedicated to increasing awareness of the benefits of bus transit - Urges support for HJ1. Billions of dollars are needed to ensure that Connecticut's infrastructure is properly maintained and operating efficiently. The establishment of a “lockbox” will give residents the assurance that money deposited in the Special Transportation Fund will be used for transportation purposes. A transportation funding “lockbox” will provide reliable, long-term funding to allow for the planning and completion of critical maintenance and improvements to our transportation infrastructure.

Marcellus Edwards, Association of Commuter Rail Employees – Members are conductors, locomotive engineers, signalmen, yardmasters, assistant stationmasters, power supervisors and rail traffic controllers in the Metro-North Railroad system – The people who ride our trains are good people who depend on our membership to get them to and from their destinations each day. That is why we support the governor's 30 year plan for infrastructure modernization. It will help drive the state's economy forward. The five-year ramp-up would dedicate $1.74 billion to the infrastructure needs of our commuter rail system. This includes Metro-North, Shoreline East and the developing New Haven to Hartford to Springfield line.

There is skepticism that new monies raised for transportation will actually go for transportation. The solution is HJ1, a constitutional amendment to create a “lockbox”. Let's put this to a vote of the people and let them decide. .It if passes, the message is delivered – our Constitution would require that every penny of revenues raised for transportation will go to transportation. The public deserves no less.

Nate Brown – Speaking on Behalf of Local 478 International Union of Operating Engineers - Over the next thirty years Connecticut is facing extreme circumstances in rebuilding and maintaining our transportation infrastructure. It is said that $100 billion in capital improvements are needed over the next 30 years to provide Connecticut residents with a “best-in-class” transportation infrastructure to alleviate congestion and modernize our roads and bridges. Our state cannot begin to achieve this goal while continuing the past practice of having moneys from the Special Transportation Fund being regularly diverted into the General Fund for other purposes. The state must first establish a “lock-box” to protect revenue in the Special Transportation Fund, and then secondly find amenable solutions for increasing revenue to better maintain and improve our aging transportation infrastructure.

The residents of Connecticut deserve a first in class transportation system and the only way to achieve that will be to make sure that the funding for transportation stays in transportation.

Don Shubert on behalf of the Connecticut Construction Industries Association, Inc.

CCIA supports this resolution that would establish the Special Transportation Fund as a perpetual fund and ensure that revenues deposited into the Special Transportation Fund would be used for transportation purposes. The Connecticut Department of Transportation estimates that it will cost $60 billion over the next thirty years to sustain the level of service on the state's transportation systems that exists today. This means that state transportation investments have to double over this time period. Dependable, stable funding is the key to success. Any diversion, pause or interruption of transportation funding in future years will increase the potential of failing to meet these needs, moving us closer to closing roads and bridges, and cutting service on public transportation. Ensuring that collected revenues will be dedicated to transportation purposes will instill public confidence in the state's ability to deliver on a promise of much needed improvements across all modes of transportation. It lays solid foundation for good public policy going forward as the state takes action on much needed transportation investments.

Eric Gjede, Assistant Counsel, CBIA – Connecticut businesses overwhelmingly (74%) support legislation that would prohibit the use of Special Transportation Funds to cover general fund shortfalls. While fiscal-restraint should be the easiest solution, a constitutional amendment to protect the Special Transportation Fund maybe what is necessary to protect the fund. While this measure did pass with considerable support in the December special session, it is critically important that it receives even more bipartisan support this session. Simply put, waiting until the 2018 elections may be too late. Some argue that the constitutional lockbox, as drafted, is not enough protection of the funds. To this, I would argue that the legalese is not the true deterrent here. It is critical that voters have the opportunity to overwhelmingly support fiscal restraint that is embodied by the lockbox proposed in this resolution. We strongly urge your support.

Mark F. Connor, Treasurer of JSL Asphalt, Inc. – headquartered in Westfield Mass. – employs 26 Connecticut Workers It is well established that Connecticut's infrastructure is aging and inadequate to meet today's demands. Passage of this resolution is key to the state's ability to deliver much needed improvements across all modes of transportation. It lays a solid foundation for much needed transportation investment.

Gary Wall, President of Tilcon, CT Inc., Headquartered in Plainville- employs 600 Connecticut Workers - It is well established that Connecticut's infrastructure is aging and inadequate to meet today's demands. Tilcon CT is ready to meet the growing demands of rebuilding Connecticut's roads and bridges. Transportation is important to the state's economy. Our company is positioned for growth by adding jobs to meet the demands of rebuilding the Connecticut infrastructure. Passage of this resolution is key to the state's ability to deliver much needed improvements across all modes of transportation. It lays a solid foundation much needed for transportation investment.

Mario Smith, President of Waters Construction Corporation – headquartered in Bridgeport, CT – employs 890 Connecticut Workers. - We support this resolution that would establish the Special Transportation Fund as a perpetual fund and ensure that revenues deposited into the Special Transportation Fund would be used for transportation purposes. Transportation is important to the state's economy. It provides the mobility and connectivity that today's companies require in an ever increasingly, fast paced and competitive global economy. Passage of this joint resolution is key to the state's ability to deliver much needed improvements across all modes of transportation. It lays a solid foundation for much needed for transportation investments.

Roy Merritt, Jr. P.E. On behalf of The Connecticut Society of Civil Engineers (CSCE) Section of The American Society of Civil Engineers - By creating a “lock-box” on the Special Transportation Fund, the citizens of Connecticut will have the assurance that revenue collected through transportation-related fees, such as the fuel (gasoline and diesel) tax and vehicle registration fees, will be used for its intended purpose of maintaining and improving our transportation infrastructure. For far too long our elected leaders have allowed the Special Transportation Fund to be “raided” by other interests, transferred to the General Fund, and used on a myriad of items not related to transportation. Whether justified or not, past siphoning of transportation funds for non-transportation purposes has compromised the quality of our transportation infrastructure and threatens the future viability of our state's economy and quality of life. We ask that our elected leaders take action to end this practice by supporting HJ1. The Connecticut Society of Civil Engineers looks forward to working with the Connecticut Legislature on this most important issue.

Robert Thavenius, President and Founder of ROTHA Contracting Company, Inc. – Avon, Connecticut - Connecticut's infrastructure is in a massive state of disrepair, following decades and decades of inaction. Transportation is important to the state economy: Corporate executives rate highway accessibility as the #1 factor in site selection decisions. (88.3% of respondents in Area Developments 29th Annual Corporate Survey and 77% of all job seekers served by The American Job Center Network). Passage of this resolution is key to the state's ability to deliver much needed improvements across all modes of transportation.

Lauren Forgione, Treasurer of the F&F Concrete Corporation – headquartered in Plantsville, CT – employs 36 Connecticut workers. - Ease of transportation is vital to the state's economy, and as we continue to lose businesses and residents in this state, we cannot afford to compromise in this area. Corporate executives rate highway accessibility as the #1 factor in site selection decision. Passage of this resolution is key to the state's ability to deliver much needed improvements across all modes of transportation and lays a solid foundation for much needed transportation investment. .

NATURE AND SOURCES OF OPPOSITION:

Senator Michael McLachlan (24th District) - Supports the idea of having a constitutional amendment to ensure that the funds of the Special Transportation Fund be used solely for transportation purposes. However, this resolution does not accomplish this worthy goal. In order to achieve a true transportation 'lockbox' there must be specific language requiring state courts to enforce the provision. This resolution does not contain that language.

In order to achieve a true transportation 'lockbox” there must be specific language that specifies the sources of revenue that are to be included, and that the funds may only be used for mass transportation, state roadway, or bridge infrastructure projects. This resolution does not contain that language.

Without these provisions, the lockbox will be as inefficient as our spending cap, which we do not enforce even though it was passed with over 80% of support from our citizens. If adopted as is, this proposed resolution will create another constitutional amendment in our state that is not enforceable. If adopted as is, this proposed resolution will still provide the legislature the ability to divert funds to other projects. Our state needs an enforceable transportation 'lockbox', which will ensure the state provides motorists the peace of mind that the roads and bridge they are traveling on are safe, and they will be able to reach their destination safely. We owe it to our constituents to provide them with as much safety as possible while they travel our roads.

Stephen Bull, President – Greater Danbury Chamber of Commerce - Both Connecticut's legislative and executive branches of government currently have the power and authority to protect the resources of the Special Transportation Fund. Legislators and the Governor can decide how much money to appropriate and spend for transportation purposes. They do not need a constitutional amendment to do that. At the same time they have the power and authority to decide how to raise revenue for transportation purposes. A constitutional amendment to do this is also unnecessary.

HJR1 is both unnecessary and seriously flawed. Although there is direction to only use the funds “solely for transportation purposes” there is no definition of what those are. Consequently, future legislators and governors could define whatever they want to be “soley for transportation purposes”.

Similarly, there is no definition of what resources (funds) must be used solely for transportation purposes. Will tolls, higher gas taxes, congestion pricing or more be considered such resources?

Connecticut's attempt at a constitutional spending cap failed because of a lack of specificity. It was repeatedly exceeded and altered to the point where the Attorney General determined it unenforceable. HJR1 proposes a constitutional amendment with even more holes in it than the previous spending cap.

For all of these reasons, the Greater Danbury Chamber strongly opposes HJR1 and urges this committee not to favorably report it.

Bob Hamilton, Director Fleet Maintenance for Bozzuto's Inc – located in Cheshire and North Haven Connecticut – employs 1,400 people. – Opposed to the proposed version of the lockbox because it is not strong enough to prevent future diversions of revenue. Fears huge increases in cost of doing business in the state of Connecticut, costs that will only be passed on to customers. He wants to focus on growing their business and providing for their customers, not paying higher and newer taxes that re not protected. Our Constitution needs to clearly indicate the sources of transportation revenue that will be put into the Special Transportation Fund in order to fix “the state's decaying and inadequate infrastructure”, given the current fiscal situation our state is in.

Suzanne Bates, Policy Director for The Yankee Institute for Public Policy – Wants to raise concerns that if this resolution is passed and voters ratify it, then lawmakers try to find a way to get around what would then be a constitutional provision. This will further damage respect for our constitution and undermine the public's confidence in the General Assembly's ability to discipline themselves when it comes to spending.

We have a constitutional amendment – the spending cap – that has never been fully enacted even though more than 80% of this state's residents voted for it 24 years ago. Polling last year showed an overwhelming majority of the state's residents continue to support the cap.

The lockbox is not the spending cap, but if you are going to pass this joint resolution, we urge you to do so only if you are confident that the General Assembly will adhere to this provision, and thereby set the example for future legislatures. If – as many suspect - you believe lawmaker will try to get around the 'lockbox' please leave this out of the state's constitution.

Frank C. DeFelice, Durham Connecticut Chairman of the Regional Planning Committee for the Lower Connecticut River valley Council of Governments, and Chairman of the Planning and Zoning Commission for the Town of Durham - Connecticut already has a “lockbox” for transportation funds. It was implemented after 1983's tragic Mianus River Bridge collapse. This “lockbox” has been raided by the legislature three (3) times since its creation. In light of the legislature's inability to maintain a budget or adopt a constitutional spending cap, this “lockbox” will undoubtedly be raided again in the future. Respectfully urges opposition to this resolution

Joseph R. Sculley, President, Motor Transport Association of Connecticut – The adoption of a strong Constitutional Amendment, or a “lockbox” that ensures that transportation revenues can only be spent on transportation purposes, would be fiscally responsible action. However, because of the way this resolution was drafted, we do not believe it constitutes the kind of lockbox that the citizens of this state want and deserve. Proponents refuse to list “sources” in the amendment. Other states that have Constitutional provisions regarding transportation name revenue sources in the Constitution. MTAC believe that an amendment to the Connecticut Constitution should name revenue sources right in the Constitution and it should identify, in general terms, the types of expenditures that can be characterized as “transportation”.

MTAC agrees with the concept of a lockbox, but believes the language needs to be strengthened.

Reported by: Mary Anderson

Date: March 23, 2016